Baidu (BIDU), The China Moonshot, Joins NASDAQ 100

Baidu (BIDU), the Chinese search engine often referred to as "China's Google", will be the first Chinese company to join the NASDAQ 100, the index of prime tech companies traded on Wall Street.

In its NASDAQ debut in August 2005, Baidu shares rose by more than 354% in one day from its $27 IPO--triggering the usual "shocked-and-appalled-at-those-idiot-investors" rhetoric from many brilliant market observers. Today, the shares trade around $390.

In 2007's Q2, Baidu dominated the Chinese internet search market with a 58.1% share. Google, while growing faster than Baidu, lingered at 22.8%. China is already the world's second-biggest Internet market, with 162 million users, so this isn't like having 58% share of some banana republic.

Yes, Baidu's stock is astronomically expensive and primed for a fall (aren't they always? Especially after they enter index lists like the NASDAQ 100 and passive-fund-buying drives the price into the stratosphere.) This said, as we noted in October, Baidu's revenue is doubling every year, this is China we're talking about, and Baidu has already proved it can fend off the Google competition. And "The Google of China" definitely has an appealing ring to it.

Disclosure: Unfortunately, we dumped the bulk of our Baidu position back in the low $100s, but we still have a few shares...